When it comes to travel, there is no doubt about it, it can get quite pricey. For many individuals who want to travel to their favourite tropical destination each year or head out on an adventure tour, travel expenses like airfare, hotel accommodations, and rental vehicles make up a large bulk of the budget. Not only can the expense limit to where you choose to go due to budget restraints but it can truly dim the experience if you do not have enough capital to enjoy yourself freely while on your trip. With this said, the fastest route to getting a significant discount or even free travel is through credit card programs. In this article, we will explore the difference between point-based and mile-based credit card programs and how they work as well as the different types of travel reward credit cards that are available.
How Come The Names of Cards Are So Confusing?
The market has multiple types of cards, all of which may bear multiple brand names and logos. This is a regular tactic used to make a card seem more appealing but it often is just confusing because a single travel rewards card can have multiple delineations. An easy way to break it down is to look for the credit card issuer, the payment processor, the rewards currency, and then the descriptive words used to differentiate the benefits offered. So for example, the Citi AAdvantage Platinum Select World Elite Mastercard has Citi Bank as the credit card issuer, Mastercard as the payment processor, AAdvantage Miles as the reward currency, and World Elite as the financial product being offered.
Do I Get A Transferable, Co-Branded, or Fixed Travel Credit Card?
When you go to choose a credit card with travel rewards, you are going to come across three distinct types. These are co-branded cards (loyalty), transferable cards (flexibility), and fixed value cards (often general credit cards). Let’s break down how these work.
- You can get several different types of co-branded cards but the most common are airline and hotel branded cards. These will carry the names of the airline or hotel and when you use these cards, you will earn miles or points towards redeeming for that specific brand. For instance, when you use a Marriott Rewards Premier Card, you are earning points towards redeeming a free night at this particular hotel chain. A lot of branded cards will have fast-tracking options for those who solely use their cards, allowing them to receive bonus points for making partner purchases.
- A transferable card basically allows you to have flexibility in where you use your points. This allows you flexibility in earning points with one partner and redeeming them with another, which means that the points are not pegged at the value of the ticket. This is incredibly valuable as it allows you to redeem expensive tickets for a relatively low amount of reward points if you know when and how to rack up the points. The only thing you need to keep in mind with these cards is that the travel points or usually not transferred on a one-to-one basis.
- A fixed value card tells you exactly what you are going to get. Generally, all rewards are often redeemed on flights booked but you can get general travel cards which are not linked to a specific airline or hotel and are often issued by your bank. These will allow you to earn points that can be used for all types of travel but the points have a fixed redemption value, usually at one point per dollar spent.
You may also come across cash back cards but these do not have any type of points or miles tied to them, and rather just provide you with a cash rebate on your purchases. These can be used to pay off travel expenses but are not specifically related to travel credit cards.
How Do The Credit Card Currencies Work: Points Vs. Miles?
Travel credit cards will issue rewards based either on a point-system or through a frequent flyer mile program. With the point-based systems, you will either be able to redeem that as if they were like money or use them to redeem rewards with a set redemption value.
- Points That Are Like Money: the value of these points are flexible and will vary, often between one and two cents. How this works is you will pay for your travel with your travel rewards credit card and then cash in the points to pay your statement off.
- Set Redemption Value Points: these points will not have a monetary value and instead act as a free redemption on an item that has a set monetary value. For instance, you may be able to get one free night at a certain hotel that would require X amount of points.
If you choose a travel rewards credit card that uses miles instead of points, these will allow you to fly with a specific airline. The neat thing about these types of cards is you don’t necessarily have to set foot on a plane to earn the miles as many of them will allow you to earn miles at certain stores or on certain types of purchases. When it comes down to it, you have to identify what rewards currency you want to focus on as this will help you narrow down which travel credit card is best for you.
Bank of England’s Haldane says inflation “tiger” is prowling
By Andy Bruce and David Milliken
LONDON (Reuters) – Bank of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the economy recovers from the COVID-19 pandemic, potentially requiring the BoE to take action.
In a clear break from other members of the Monetary Policy Committee (MPC) who are more relaxed about the outlook for consumer prices, Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.
“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online. “But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”
Haldane’s comments prompted British government bond prices to fall to their lowest level in almost a year and sterling to rise as he warned that investors may not be adequately positioned for the risk of higher inflation or BoE rates.
“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets,” Haldane said.
He pointed to the BoE’s latest estimate of slack in Britain’s economy, which was much smaller and likely to be less persistent than after the 2008 financial crisis, leaving less room for the economy to grow before generating price pressures.
Haldane also cited a glut of savings built by businesses and households during the pandemic that could be unleashed in the form of higher spending, as well as the government’s extensive fiscal response to the pandemic and other factors.
Disinflationary forces could return if risks from COVID-19 or other sources proved more persistent than expected, he said.
But in Haldane’s judgement, inflation risked overshooting the BoE’s 2% target for a sustained period – in contrast to its official forecasts published early this month that showed only a very small overshoot in 2022 and early 2023.
Haldane’s comments put him at the most hawkish end among the nine members of the MPC.
Deputy Governor Dave Ramsden on Friday said risks to UK inflation were broadly balanced.
“I see inflation expectations – whatever measure you look at – well anchored,” Ramsden said following a speech given online, echoing comments from fellow deputy governor Ben Broadbent on Wednesday.
(Editing by Larry King and John Stonestreet)
Bitcoin slumps 6%, heads for worst week since March
By Ritvik Carvalho
LONDON (Reuters) – Bitcoin fell over 6% on Friday to its lowest in two weeks as a rout in global bond markets sent yields flying and sparked a sell-off in riskier assets.
The world’s biggest cryptocurrency slumped as low as $44,451 before recovering most of its losses. It was last trading down 1.2% at $46,525, on course for a drop of almost 20% this week, which would be its heaviest weekly loss since March last year.
The sell-off echoed that in equity markets, where European stocks tumbled as much as 1.5%, with concerns over lofty valuations also hammering demand. Asian stocks fell by the most in nine months.
“When flight to safety mode is on, it is the riskier investments that get pulled first,” Denis Vinokourov of London-based cryptocurrency exchange BeQuant wrote in a note.
Bitcoin has risen about 60% from the start of the year, hitting an all-time high of $58,354 this month as mainstream companies such as Tesla Inc and Mastercard Inc embraced cryptocurrencies.
Its stunning gains in recent months have led to concerns from investment banks over sky-high valuations and calls from governments and financial regulators for tighter regulation.
(Reporting by Ritvik Carvalho; additional reporting by Tom Wilson; editing by Dhara Ranasinghe, Karin Strohecker, William Maclean)
Britain sets out blueprint to keep fintech ‘crown’ after Brexit
By Huw Jones
LONDON (Reuters) – Brexit, COVID-19 and overseas competition are challenging fintech’s future, and Britain should act to stay competitive for the sector, a government-backed review said on Friday.
Britain’s departure from the European Union has cut the sector’s access to the world’s biggest single market, making the UK less attractive for fintechs wanting to expand cross-border.
The review headed by Ron Kalifa, former CEO of payments fintech Worldpay, sets out a “strategy and delivery model” that includes a new billion pound start-up fund and fast-tracking work visas for hiring the best talent globally.
“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.
Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.
“This review will make an important contribution to our plan to retain the UK’s fintech crown,” finance minister Rishi Sunak said, adding the government will respond in due course.
The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance all mean the sector’s future in Britain is not assured.
Britain increasingly needs to represent itself as a strong fintech scale-up destination as well as one for start-ups, it added.
The review recommends more flexible listing rules for fintechs to catch up with New York.
“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.
The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).
“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.
Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.
“It’s a question of knowing who to call when there’s a problem,” Swinburne said.
($1 = 0.7064 pounds)
(Reporting by Huw Jones; editing by Hugh Lawson and Jason Neely)
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